Discover how to use a custom Microsoft Excel upload tool rather than out-of-the-box functionality to update the standard price of a raw material for inventory valuation. Learn about additional functionalities and system validations the custom tool offers to create a more efficient and accurate business process for updating the standard price of raw materials.

Key Concept

Every manufacturing enterprise regularly updates or changes the standard prices of raw materials. Business users should update the value of the standard price of all materials before anyone posts inventory movements or any logistics transactions. This ensures accurate inventory valuation and helps minimize price differences and variance postings.

The standard price of a material is updated in the material master in local currency (company code currency). That means the update process may require end users to carry out a complex currency conversion depending on the input currency for standard price, parallel currency settings, and the local currency of the company code. In many SAP off-the-shelf (OTS) transactions, the currency conversion process is either very complex or users have to manually do currency conversion and update the converted value in the transaction. Errors in this calculation process can cause incorrect inventory valuation.

In product cost controlling, SAP offers different OTS functionalities to update the standard price of a material. Based on the type of business requirements associated with the update of the standard price and complexity involved in the process, you need to select and implement the relevant SAP solution. The sidebar “Overview of Standard SAP OTS Functionalities” explains the functionality of each of these standard transactions, and the pros and cons of each.

As an alternative to the standard transactions, you can also design a custom Microsoft Excel upload functionality using a standard BAPI. The custom Excel-based upload tool can help overcome limitations involved in standard transactions and facilitate the price update process. Some of the benefits of the tool include:

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Muralidharan Sethuraman

Muralidharan Sethuraman is director enterprise ERP IT finance at Johnson Controls. He has more than 16 years of industry experience leading and managing multiple SAP implementation and business transformation programs across geographies. Muralidharan is currently leading the SAP S/4HANA program at Johnson Controls. He specializes in SAP Financials and has done design lead, solution architect roles in global SAP implementation programs. Muralidharan is a subject matter expert in the areas of product cost analysis and management, inventory and working capital management, management reporting and profitability analysis, financial analytics and reporting, and business planning. He has published multiple articles in Financials Expert in these areas.